For a risk-averse individual, as wealth increases, total utility ________ and marginal utility ________
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
B
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In the first half of 2008, food and energy costs in the United States increased. At the same time, the financial crisis slowed production. As a result, economists warned that the economy would
A) suffer an inflationary gap. B) see a decrease in aggregate demand and an increase in long-run aggregate supply. C) experience stagflation. D) see an increase in potential GDP.
Pure public goods:
A. are, by definition, goods and services provided by the government. B. should always be provided by government. C. should always be provided by private firms. D. are frequently provided by the government, and are sometimes provided by private firms.
The risk spread is:
A. assigned by a bond-rating agency. B. less than 0 (zero) for a U.S. Treasury bond. C. the difference between the bond's yield and the yield on a U.S. Treasury bond of the same maturity. D. the difference between a bond's purchase price and selling price.
The situation where marketers introduce products that are not designed to sell, but are designed to manipulate consumers into choosing a similar, but superior product is known as:
A. the decoy effect. B. the anchoring effect. C. bundling. D. mental accounting.